Japan’s Population Shrinks for Third Year as Aging Increases

April 16 (Bloomberg) -- Japan’s population slid for a third
year with the proportion of people over the age of 65 at a
global record, underscoring the challenge the world’s most-indebted economy faces in financing its aging society.

The population declined by 0.17 percent to 127.3 million as
of Oct. 1, as the country maintains one of the world’s lowest
birth rates. People age 65 or older made up one fourth of the
total, the highest-ever percentage, as postwar baby boomers head
into retirement, the Internal Affairs Ministry said on its
website yesterday. That’s the highest of any country in the
world, according to the Population Reference Bureau.

Japan’s debt has swelled to more than twice the size of the
country’s economic output, due partly to expanding health and
social security costs associated with its aging population. As
well as increasing the sales tax to 8 percent from 5 percent
this month, Prime Minister Shinzo Abe is seeking to encourage
more women into the workforce to bolster the economy and
government coffers and has also considered loosening
restrictions on immigration.

Lot to Learn

“We have argued for some time that Japan has a lot to
learn from Australia and the U.S., which have demonstrated
successfully that welcoming people from a variety of nations,
who may think differently and have different cultures but are
highly talented, strengthens the economy on both the demand and
supply sides,” Mizuho Securities Co.’s Chief Market Economist
Yasunari Ueno wrote in a report on April 9.

A shrinking labor force is complicating the efforts to
raise tax revenue. The working-age population, defined as those
between 15 and 64 years old, fell to less than 80 million for
the first time in 32 years, the ministry said in its report.
Japan’s fertility rate of 1.39 children per woman is the fourth
lowest among the nations of the Organization for Economic
Cooperation and Development.

“The problem of the low birthrate and aging population is
getting more serious and the scale of the fall is remarkable,”
Chief Cabinet Secretary Yoshihide Suga told reporters. “Given
the circumstances, it is a matter of urgency to build a society
where women can shine,” he said, adding that more child-care
provision and a better working environment for women were among
the necessary measures.

Children up to 14 years old made up just 12.9 percent of
the population, according to the ministry, only slightly more
than the 12.3 percent of the population age 75 or older.